The Government has now pledged to fill the shortfall with public money until at least 2020, which based on the projections that Brexit will take two years, means the UK government will make up a two-year shortfall.

However, whilst the Government will guarantee funding for farmers and universities, Mr Gauke make clear that other sources of money will be reviewed to ensure that the Treasury is getting value for money.

It means that EU subsidies for initiatives such as infrastructure and energy projects could be reviewed and potentially discontinued.

Watch | Hammond: 'The UK economy is fundamentally strong'

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In his letter to David Davis, the Secretary of State for Exiting the EU, Mr Gauke said: “Naturally, we will need to address the future of all programmes that are currently EU-funded, once we have left the EU. Leaving the EU means we will want to take our own decisions about how to deliver the policy objectives previously targeted by EU funding.

“Over the coming months, we will consult closely with stakeholders to review all EU funding schemes in the round, to ensure that any ongoing funding commitments best serve the UK‘s national interest, while ensuring appropriate investor certainty.”

The money to continue subsidising farmers and universities will come from Britain’s £8.5billion net contribution to the EU, which it will cease to pay upon its exit from the EU.

Mr Hammond said last week: "The UK will continue to have the all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.

“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.

“That’s why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave."